HIGH LEVEL DIALOGUE ON ASEAN ITALY ECONOMIC RELATIONS

HIGH LEVEL DIALOGUE ON ASEAN ITALYECONOMIC RELATIONS

Second Edition

Shangri-La Hotel, Singapore

Wednesday, April 11 and Thursday, April 12, 2018

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High Level Dialogue on ASEAN Italy Economic Relations 2018

Key points

Vision, aims and actors of the High Level Dialogue initiative

ASEAN region is the emerging opportunity


3


The European House – Ambrosetti: key facts and figures*

200PEOPLETHINK

TANK

931°

(**) In the University of Pennsylvania 2016 Global Go To Think Tanks Report

EVENTS

300

Organized meetings and

gatherings yearly

EXPERTS

2,000

National and international

experts involved in per year

10,000MANAGER

Accompanied in their search for

growth and development

Over 100STUDIES AND

RESEARCH

Addressed to Italian and

international institutions per year

In cross-border M&A operations,

with its affiliate

K-Finance

CONSULTING FIRM

Over 50

YEARS

Working alongside

entrepreneurs to help them

grow

400CLIENTS

Served in consulting per year

Demonstrating their passion and

commitment

Served each year, through

counseling in the Family

Agreements and Governance

Systems

FAMILY BUSINESSES

COUNTRIES

12

Direct presence or partnership

1°

1st in Italy, in the European top tenand in the World top one-hundredmost-esteemed

independent out of 6,846 Think Tanks

globally (**)

ENGINEERS

130

Dedicated to the digital

transformation consultancy by partnering with

CEFRIEL (Politecnico of

Milan)(*) With reference to a single year

4


We want to build around the world, in the

countries with the greatest latent potential for Italy (and Europe),

communities of leaders with a common vision and knowledge,

able to positively influence bilateral economic agendas

TEH-A provides high-level discussion and networking platforms to the international leaders

5


Key results of the ASEAN – Italy High Level Dialogue 2018

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Pooling system with the top executives and entrepreneurs at the 29th Finance Workshop, April 6 and 7, 2018

Question: ASEAN countries are one of the main areas for investments. How well-known is this opportunity in Italy? (1=not very; 6=extremely)

10,7%

28,7%

21,3%

16,4%

8,2%

4,1%

10,7%

1

2

3

4

5

6

7 - I don't know

61% little know

Source: The European House – Ambrosetti elaboration, 2018

7


The High Level Dialogue on ASEAN Italy Economic Relations

Institutionalize a high-level and exclusive connection platform between ASEAN countries and Italy where their leaders can:

Learn about the opportunities of the two Regions

Interact on a concerted basis among peer visionary business leaders

Build profitable strategic and economic partnerships

Knowledge Personal feeling Trust

Time-frame

2017 1st ASEAN - Italy Dialogue(Jakarta)

20182nd ASEAN - Italy Dialogue(Singapore)

Editions2019, 2020, 2021,…

Mission

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The supporting partners of the High Level Dialogue 2018

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Project working model

Think Tank

Com

panie

s part

ner

of

the initia

tive

Advis

ors

TEH

-A

Ass

oci

azi

one

Italia

–Ase

an

Italia

n T

rade

Agency

-IT

A

Confindust

ria

Italia

n M

inis

try

of

Fore

ign

Affairs

ASEAN Ambassadors to Italy

ASEAN

G

overn

ments

and s

takehold

ers

Position papers

High Level Dialogue on ASEAN ItalyEconomic Relations

“The Magazine”

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Advisory board members (1/3)

Associazione Italia-ASEAN□ Enrico Letta (President; former Italian Prime Minister)

□ Romeo Orlandi (Vice President)

□ Michelangelo Pipan (Vice President)

Leonardo Company□ Alessandro Profumo (Chief Executive Officer)

□ Raffaella Luglini (Executive Vice President External Relations, Communication and Institutional Affairs, Investor Relations and Sustainability)

□ Angelica Falchi (Vice President Communication)

□ Pietro Bruno (Global Market Development Vice President; Head of East Asia Regional Unit)

□ Francesco Quintano (Vice President Strategy and New Initiatives)

UBI Banca□ Victor Massiah (Chief Executive Officer)

□ Frederik Geertman (Chief Commercial Officer)

□ Luca Monti (Head of Global Transaction Banking)

□ Isabella Moavero (Head of Financial Institutions)

□ Paolo Vitali (Head of International Network, Global Transaction Banking)

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The European House – Ambrosetti

□ Valerio De Molli (Managing Partner and CEO)

□ Paolo Borzatta (Senior Partner)

Ministry of Foreign Affairs and International Cooperation

□ Angelino Alfano (Minister of Foreign Affairs and International Cooperation)

□ Vincenzo De Luca (Director General, Directorate General for Cultural and Economic Promotion and Innovation)

□ Stefano Nicoletti (Head of Office, Initiatives for the internationalization of the Italian economic system)

□ Valentina Muiesan (Head Of Division - South East Asia, Pacific, Antarctica)

Italian Trade Agency

□ Michele Scannavini (President)

□ Piergiogio Borgogelli (Director General)

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Confindustria

□ Vincenzo Boccia (President)

□ Licia Mattioli (Vice President for Internationalization)

□ Camilla Cionini Visani (Managing Director of International Affairs)

□ Annalisa Bisson (Area International Affairs)

Advisors

□ Yuen Foong Khong (Li Ka Shing Professor of Political Science, Lee Kuan Yew, School of Public Policy – Singapore)

□ Thomas Lembong (Chairman, BKPM, Indonesia Investment Coordinating Board – Indonesia)

□ Melvyn Pun Chi Tung (CEO and Executive Director, Yoma Strategic Holdings – Myanmar)

□ Wei Chuen Chua (Regional Vice President, Europe, Economic Development Board – Singapore)

□ Michael Yeoh (Chairman, WCES & CEO, Asian Strategy & Leadership Institute – Malesia)

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Key points




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ASEAN is today an economic powerhouse

Source: The European House – Ambrosetti elaboration on UNCTAD, World Bank and Associazione Italia - ASEAN data, 2018

GDP

Householdconsumption*

FDI inflow

Government expenditure

Import

Export

$2.5 trillion (2016) (+4,9% vs 2015)

$1.8 trillion (2016) (+3.3% vs 2015)

(*) Household final consumption expenditure per capita

$4,862 (avg. 2016) ~14% GDP (avg. 2016)

$1.3 trillion (2016)

$1.5 trillion (2016)

3rd largest economy in Asia and 6th largest in the world, projected to be the 4th

largest in 2030

3rd labor force in the world, behind China and India

60% of total growth since 1990 has come from productivity gains

15


ASEAN countries are expected to experience robust growth albeit at different paces

INDONESIA

PHILIPPINES

SINGAPORE

MALAYSIA

THAILAND

VIETNAM

BRUNEI

LAOMYANMAR

CAMBODIA

GDP ($ bln), 2016 vs 2022e

2016 2022

66.3 120.2

2016 2022

406.9 519.1

2016 2022

296.3 488.9 2016 2022

296.4 340.8 2016 2022

932.4 1,615.6

2016 2022

19.4 31.6

2016 2022

13.8 23.12016 2022

201.3 314.2

2016 2022

11.2 16.5

2016 2022

304.7 579.3

Source: The European House – Ambrosetti elaboration on UN, 2018

+47.1%

+90.1%

+62.7%

+73.3%

+14.8%

+65.0%

+27.5%

+81.3%+67.7%

+56.1%

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ASEAN area plays a key role in commerce...

Source: The European House – Ambrosetti elaboration on IMF data, 2018

2,212

2,198

1,595

1,459

809

744

734

605

555

474

US

China

Germany

ASEAN

Japan

France

UK

South Korea

Italy

Canada

2,713

1,948

1,333

1,321

787

773

768

510

502

491

US

China

Germany

ASEAN

UK

France

Japan

India

South Korea

Italy

Export, top 10 countries at global level($ bln), 2016

Import, top 10 countries at global level($ bln), 2016

Considered as a single entity ASEAN countries would rank4th in the world as import/export value

17


... and Free Trade Agreements with countries worldwide are increasing steadily over time

6

5

4

3

2

1

0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

1050

152025303540

4550

ASEAN FTAs with Non-ASEAN Countries, 1995-2016

New FTAs(left)

Cumulative(Right)

Source: The European House – Ambrosetti elaboration on ASEANstat, 2018

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The ASEAN area population is expected to sharply increase...

Population forecast to 2050, (Index 100 = 2015)

Source: The European House – Ambrosetti elaboration on UN population data, 2018

126,7

125,6

121,8

97,7

96,6

90

100

110

120

130

2015 2020 2025 2030 2035 2040 2045 2050

India ASEAN United States of America China Europe

19


… accounting as the world’s 3rd largest market by 2050

Source: The European House – Ambrosetti elaboration on UN population data, 2018

India1,659China

1,364

USA390

EU716

Japan109

Population forecast to 2050, selected economies (values in mln)

ASEAN795

20


The population expenditure is increasing constantly...

Source: The European House – Ambrosetti elaboration on World Bank and DBS data, 2018

ASEAN countries will, at least, double their level of private consumption to reach $8.6 trillion by 2020

It translates to a +8.0% CAGR* (2010-2020)compared to a +2.5% of the US0

1.000

2.000

3.000

4.000

5.000

6.000

2000

20

01

2002

2003

2004

2005

2006

2007

2008

2009

20

10

2011

2012

2013

2014

2015

2016

China

ASEAN

India

Household final consumption expenditure per capita, (constant 2010 $), 2000-2016

(*) Compound Annual Growth Rate

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... and the consuming class is expected to double by 2025

Source: The European House – Ambrosetti elaboration on Standard Chartered Bank and Euromonitor data, 2018

$7,500-20,000 $20,000-$70,000 >$70,000

Consuming class in ASEAN by income bracket, 2010 vs 2025 (mln)

By 2025, 17 mln households in China and 6 mln in Indiawill have an income above $70,000

ASEAN countries have one of the highest saving rates in the world at around 30% and by 2020 they will deliver more than $2 trillion of new consumption

45,21

74,76

19,18

40,94

2,74

7,12

2010 2025

x2123

(17% of population)

67(11% of

population)

22


ASEAN countries more than doubled their share of global inward stock of FDI

Inward FDI, stock% of global, 2000

Inward FDI, stock% of global, 2016

ASEAN EU-28 United States China* Others

Source: The European House – Ambrosetti elaboration on UNCTAD data, 2018

3,4%

31,0%

37,2%

8,4%

20,0%

7,0%

28,7%

23,9%

11,0%

29,4%

(*) Including Hong Kong

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Foreign countries are deeply investing in ASEAN area

FDI inward stock, top 10 recipient countries ($ bln), 2016

Source: The European House – Ambrosetti elaboration on IMF data, 2018 (*) Compound Annual Growth Rate

58,6%

12,6%

10,1%

6,5%

6,2%

3,4%1,2% 0,9% 0,3%

0,3% Singapore

Indonesia

Thailand

Malaysia

Viet Nam

Philippines

Myanmar

Cambodia

Brunei

Shares of ASEAN FDI inward stock by member countries (%), 2016

6.391,3

1.590,8

1.354,4

1.871,9

1.196,5

956,1

839,6

801,1

793,1

771,1

US

Hong Kong

China

ASEAN

UK

Canada

Ireland

Netherla…

Switzerla…

Germany

2,945.2

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ASEAN – Italian trade is increasing


Italian trade flows with ASEAN, 2009 – 2016(import, export and trade balance; $ bln)

7,14 7,639,82 10,41 11,36 11,62

10,08 10,33

5.277.25

9.147.72 8.03 8.68 7.96 8.14

1,870,38 0,68

2,70 3,33 2,94 2,12 2,20

2009 2010 2011 2012 2013 2014 2015 2016

Export Import Trade balance

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Computer and electronics

22.1%

Food 19.4%

Leather goods 9.4%Clothes

7.8%

Machinery and

equipment6.2%

Agriculture food and animals 6.1%

Others 29.1%

Import from ASEAN to Italy, 2016(product categories)

Machinery and

equipment 33.3%

Chemical products 9.3%Computer and

electronics 8.5%Leather goods 7.2%

Electrical equipment

6.1%

Food5.0%

Others 30.6%

Machinery and equipment and computer are the most traded commodities

Source: The European House – Ambrosetti elaboration on Istat data, 2018

Export from Italy to ASEAN, 2016(product categories)

26


However, Italy still ranks in the sidelines among ASEAN trade partners...


362,3

211,6

200,3

121,2

117,

6

112,8

93,6

92,3

84,9

82,3

58,9

57,

1

51,6

50,3

36,1

35,9

35,5

29,7

28,3

26,1

23,4

18

.4

16,7

15,2

12,4

Chin

a

United S

tate

s

Japan

Republic

of

Kore

a

Mala

ysi

a

Sin

gapore

Hong K

ong

Taiw

an

Thaila

nd

Indonesi

a

India

Germ

any

Aust

ralia

Vie

t N

am

Neth

erlands

Phili

ppin

es

United A

rab E

mirate

s

Fra

nce

United K

ingdom

Saudi Ara

bia

Sw

itze

rland

Italy

Belg

ium

Bra

zil

Canada

Top 25 ASEAN trade partners (import + export, $ bln), 2016

27


22,1

5

17,

40

12,1

9

8,1

6

7,91

6,7

0

5,6

8

5,1

9

2,6

9

2,2

4

1,2

5

0,8

9

0,8

1

0,7

2

0,4

1

0,1

8

0,1

2

0,0

4

-0,0

7

-0,8

6

Intr

a-A

SEAN

Japan

US

Chin

a

Neth

erlands

UK

South

Kore

a

Aust

ralia

Denm

ark

New

Zela

nd

India

Canada

Belg

ium

Fra

nce

Germ

any

Fin

land

Italy

Spain

Aust

ira

Irela

nd

... and among investors in ASEAN

Source: The European House – Ambrosetti elaboration on ASEAN data, 2018

FDI flows in ASEAN by first 20 countries($ bln), 2016

17th

28


Italy-ASEAN Economic Relations can generate mutual positive spillovers

Italy is:

1st in Europe for number of SMEs

1st country in the world for research productivity

1st country in the world for citations per researcher

1st or 2nd in 50% of 15 global sectors in terms of competitiveness

one of the five countries in the world with a manufacturing surplus of more than 100 billion dollars

4th in EU for value of production in high-tech sectors

2nd in EU for fiscal support to innovation

Italy’s business ecosystem

represents a perfect match for ASEAN countries

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Key points




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ASEAN – Italy High Level Dialogue 2018 programme

= Plenary Sessions = Networking

Wednesday, April 11, 2018 Thursday, April 12, 2018

Tools for economic cooperation

Closing remarks

Reception hosted by the Italian

AmbassadorGala dinner

Opening session

Arrival and registration

Competences for development

Buffet lunch

Doing business in South-East Asia

Macroeconomic and geopolitical outlook

Coffee break

7:00 pm - 10:00 pm

12:45 pm - 2:00 pm

3:30 pm - 4:00 pm

4:00 pm - 5:30 pm

11:30 am - 12:45 pm

2:00 pm - 3:30 pm

Press briefingTechnologies for the future

Coffee break

7:00 pm - 10:00 pm

1:00 pm – 2:15 pm

3:30 pm – 4:45 pm

4:45 pm - 5:00 pm

11:45 am – 1:00 pm

9:00 am – 10:00 am

10:00 am - 11:15 am

2:15 pm - 3:30 pm

11:15 am - 11:45 am

The future of ASEAN Italy manufacturing partnerships

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ASEAN – Italy High Level Dialogue 2018 topics

The macroeconomic and geopolitical outlook of the ASEAN area

Doing business in South-East Asia, local partnerships and joint ventures

ASEAN regional integration and impacts of Belt and Road initiative

Advanced manufacturing, artificial intelligence and 4.0 machinery and capital good

Innovation, start-ups and digital hubs, and value-added industrial partnerships

Technologies for safety and security of land, sea and infrastructure

Finance, investment and trade agreements

And many others…

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“We need to keep moving forward, opening doors, and doing new things, because we’re curious and

curiosity keeps leading us down new paths”

(Walt Disney)

HIGH LEVEL DIALOGUE ON ASEAN ITALY ECONOMIC RELATIONS

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